Which buy-to-let is right for you?

  

This week a retired couple moving to Chichester contacted me for some advice. They were looking to invest in a few rental properties to supplement their pensions and wondered what I thought they should consider. They had been to four local estate agents who each had the perfect property for them. Yet they were all in a different part of town and in various states of repair! So, what should they buy?

It depends; different circumstances call for a different approach to property investment:

- ‘Bargains’ can be elusive in and around Chichester as it is an area in high demand. Modest rental returns (yields average 4.4%) should, however, give way to better long-term prospects for capital growth.

- People with plenty of time on their hands may want to look further afield (e.g. Portsmouth, Havant or Bognor Regis) where property prices are lower and a higher initial return can be found. Bear in mind though that these relatively cheaper areas may require more management, not rent as easily, nor provide such positive long-term prospects.

- Newer-build properties will require less maintenance and should attract good quality tenants. This type of property can give you a quieter life but at a higher purchase price, which will impact your initial rental yield.

- ‘Doer-uppers’ on the other hand can be great if you have the skills, time and money to inject new life in to a tired property. Buying the right property at the right price, with a sensible budget for refurbishment, may maximise your returns.

The retired couple had worked hard for the past 40 years and now wanted the quiet life, with a safe investment giving them a reasonable return. They had a good amount of capital to invest and did not want to undertake a project nor spend hours chasing after ‘problematic tenants’.

In this instance I recommended they look at modern houses in and around Chichester, which should prove to be a good long-term investment. Well-kept properties will attract good quality, long-term tenants with fewer maintenance issues. They would be able to move people straight in and start earning a decent (4 - 5%) return on their money.

Whilst it may not make them a fortune overnight it is simple and relatively safe, which is what they wanted. It beats the return from a savings account too!

Consider the following when thinking about buying a rental property:

- What is your budget?

- What return are you seeking?

- How much spare time do you have?

- Are you looking for a project?

- What type of tenants do you want?

- Which location best suits your criteria?

- Do you have the knowledge to manage it yourself?

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If you are looking for an agent that is well-established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on clive@crjlettings.co.uk or call 01243 624 599.

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